Here are the top five things you need to know in financial markets on Monday, April 11:
1. China’s inflation comes in lower than expected; World Bank cuts growth forecast
Consumer prices for March in China fell 0.4%, more than the expected 0.3% decline month-on-month and up 2.3% year-on-year, less than the 2.5% gain seen, according to official data released on Monday.
The reading is another sign that the world’s second largest economy is losing momentum as investors wait for the release of China’s first quarter gross domestic product at 2:00GMT on Friday, or 10:00PM ET, Thursday, which is forecast to drop to 6.7% from the prior 6.8%.
The World Bank reduced its forecast for economic growth in the East Asia and Pacific region on Monday due to expectations of a weaker performance from China in the next three years, while market participants are expecting the International Monetary Fund to cut its own forecasts for worldwide growth on Tuesday.
2. U.S. first quarter earnings season kicks off
Alcoa (NYSE:AA) is scheduled to kick off the first quarter earnings season after the market closes on Monday. Wall Street analysts are expecting a third straight quarter of declines in both earnings and revenue, given weakness in aluminum prices.
On a broader basis, U.S. first quarter earnings per share are forecast to decline 7.9% year on year, the third quarterly profit fall in a row. The energy sector, expected to have its first quarterly loss in at least 10 years, will be the biggest drag.
3. Japan officials try to stave off yen strength
As the dollar hit fresh 17-month lows against the yen on Monday, Bank of Japan governor Haruhiko Kuroda said that they will continue to monitor market movements and won’t hesitate to add more stimulus if needed.
Additionally, Japan’s Chief Cabinet Secretary Yoshihide Suga said Monday that the government was closely monitoring the foreign exchange market and added that the moves in the yen were one-sided and speculative.
USD/JPY hit lows of 107.65 on Monday, its weakest level since October 2014.
4. German finance minister calls for central banks to tighten monetary policy
Germany’s finance minister Wolfgang Schauble called on central banks to start hiking rates, saying that “excessive liquidity has become more a cause than a solution to the problem”.
“I just said to (U.S. Treasury Secretary) Jack Lew that you should encourage the Federal Reserve and we should encourage the European Central Bank and the Bank of England in a concerted action, to carefully but slowly exit,” Schauble was reported by the Wall Street Journal as saying late Friday at a prize ceremony organized by a German think tank.
5. Oil slips as April 17 meeting of producers nears
Oil prices slipped as analysts warned that a planned meeting of major oil producers in Doha later this month would have only a limited effect on curbing global overproduction.
Barclays (LON:BARC) pointed out that Iran and Iraq have the potential to grow output and would not be involved in a deal, while Goldman Sachs (NYSE:GS) noted that a production freeze at recent output levels would not accelerate the rebalancing of the oil market.
U.S. crude oil futures fell 0.38% to $39.57, at 9:55AM GMT, or 5:55AM ET, while Brent oil slipped 0.19% to $41.86.